LOI LETTER HEADER
Commercial Lease LOIs look different than purchase LOI because they contain different terms.
Rent Abatement – In LA Class A Office Market common to get 1 month rent abatement per year. This will lowered the $PSF so factor it into your calculations.
Tenant Improvements TIs – sometimes the landlord pays the TIs and sometimes the tenant. Landlords will also make spec suites.
The size of the suite (Price calculated by rent times the square foot so the calculation of sqft factors into the cost and expenses)
Common Area Maintance Fee (CAM) – You pay some of landlords taxes as part of your lease fees as well as the utility and maintenance cost to upkeep the facility.
Utilities – what landlord pays what tenant pays
Lease Term- for commercial it is usually 3 years, or 5 years- Landlords prefer longer lease terms. For shorter lease terms search for a sublease. These leases usually would contain an option to extend similar term Renewal options
HVAC- most buildings only have HVAC M-F may be additional cost to weekends.
Security Deposit – 1-2 Months Rent
Holdover – If tenant stays to the end of the lease and does not renew and does not leave, landlord can raise the rent 150%.
Signage – To put up signage whereever the building has signage
Security- Hours and contacts
Parking- Most Los Angeles class A office buiding’s have parking ratios per 1,000/sqft.